Duluth, Minn.-based Essentia Health will continue to operate a hospital in Fosston, Minn., after an arbitration panel ruled in the health system's favor in a dispute with the city.
Essentia Health-Fosston (Minn.) paused labor and delivery services in June 2022. Fosston Mayor Jim Offerdahl told Becker's in January that the city had reason to believe that it was never a pause, "it really was a shutdown, but they called it that and led everyone to believe it was that for nearly a year."
Mr. Offerdahl said an agreement was reached between First Care Medical Services, a city-owned 501(c)(3) organization that operated the Fosston hospital, and Essentia Health in 2009, which gave Essentia control of the hospital with First Care Medical Services retaining ownership of the property and holding the hospital's license.
The city sought to terminate the agreement and regain control of the hospital.
Essentia said in a Sept. 11 news release that the arbitrator's ruling affirmed the health system's position that it operated the hospital within the requirements of the 2009 affiliation agreement.
The ruling comes after a hearing in mid-July, according to the release. The ruling means that Essentia will continue to operate the hospital, clinic, assisted-living and long-term care facilities in Fosston, as well as clinics in Bagley (Minn.) and Oklee (Minn.).
"Now that the arbitration process is over, Essentia is focused on the opportunity to engage our patients, colleagues and the community in building a shared vision for the future of healthcare in Fosston," Stefanie Gefroh, MD, interim president of Essentia Health’s West Market, said in the release. "We look forward to working with city leaders in support of that objective and for the patients we're honored to serve."
The city said in a Sept. 11 news release shared with Becker's that although the ruling found no breach of contract regarding OB services, officials believe "there have been other breaches of contract by Essentia Health that can, and will, be pursued as part of ongoing efforts to restore local governance."
"While we had hoped for a different result, we are committed to ensuring that healthcare services in Fosston remain robust and responsive to the needs of our residents," Mr. Offerdahl said in the release.